Displaying items by tag: Elise Stefanik, Jeffrey Many
STATEWIDE — Last week, U.S. Rep. Elise Stefanik (R-Willsboro) and other federal lawmakers wrote a letter to Treasury Secretary Steve Mnuchin opposing the planned elimination of a federal tax deduction related to state and local tax payments.
The congresswoman indicated that, every year, more than 3 million New Yorkers deduct property and state taxes paid from their federal returns. It has been considered standard practice—primarily among homeowners—for more than a century, according to Stefanik.
She said a “tax reform plan” presented this year by President Donald Trump proposed eliminating that deduction. Specific parts of the president’s plan will be negotiated in the months ahead during the congressional budget process for fiscal year 2018.
“We write to you—on behalf of the hardworking, middle-class taxpayers we represent—to express our deep concerns about the proposed elimination of the state and local tax (SALT) deduction,” Stefanik and the lawmakers wrote to Mnuchin in a June 27 letter. “Without the SALT deduction, taxpayers in all 50 states and in the District of Columbia would be doubly taxed—they would pay federal income taxes on the money they pay to their state and local governments.”
Jeffrey Many, a certified public accountant in Saratoga Springs, cited the example of a taxpayer with $150,000 in annual income who deducted more than $13,000 paid in local property and state taxes. That saved the taxpayer between $3,000 and $4,000 on a federal return, Many said.
Many, who routinely monitors developments at the federal level, called it “a very complicated issue” because of the various tax deductions that are at stake. He said the matter being addressed by Stefanik and her colleagues applies mainly to heavily taxed states like California, Massachusetts and New York.
“It’s a long way from getting passed,” Many added.
According to a fact sheet provided by the National Association of Realtors (NAR), Trump’s plan follows years of debates in the U.S. Congress that have focused on reducing tax rates nationwide for businesses and individuals.
“This means that to ‘pay for’ the lower rates, Congress would need to limit or repeal widely utilized deductions, which could include state and local tax deductions,” the realtors’ group explains.
Critics of the deduction for state and local taxes, the NAR statement added, argue that it “subsidizes irresponsible spending by certain states, and forces taxpayers in lower-tax jurisdictions to pay more federal tax.”
In the June 27 letter, Stefanik countered that New York “has been a net payer to the federal government for decades.”
She cited a current example of $96 billion in personal income taxes paid to the federal government by New York City residents. Federal agencies, in turn, provided the city with roughly $61 billion in funds and services.
“Because we laud and support the goals of growth and job creation, tax simplification and tax relief, any reform package must equal the benefits that state and local tax deductibility have already provided for over 100 years,” Stefanik and the others wrote to Mnuchin.
“We hope you will consider the impact on the people we represent,” the letter concludes, “as we continue crafting an innovative plan that also respects long-standing principles of federalism.”
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